A trust is a way of holding and managing property, whereby the person setting up the trust (called the grantor, settlor, or trustor) transfers property to a trustee, who manages the property for the benefit of others (called beneficiaries).
How Much Does It Cost To Set Up A Trust In South Africa?
Setting up a trust can cost between R4,000 and R12,000. Careful consideration must be given to the wording of the trust deed because you want to ensure that the trust is both tax-effective, and also that your family will continue to benefit when you die.
How do I set up a trust in South Africa?
A living trust is created by the drafting of a trust deed and registering the trust (along with various prescribed forms) with the Master of the High Court.
The trust becomes effective as soon as it is registered. To help you get started on understanding the options available, here’s an overview of the three primary classes of trusts.
Revocable Trusts.
Irrevocable Trusts.
Testamentary Trusts.
Trusts benefit from total asset protection and, as such, ensure that properties cannot be seized by creditors.
Because property in a trust no longer falls into one’s personal estate, it is not subject to inheritance tax.
The advantages of placing your house in a trust include avoiding probate court, saving on estate taxes and possibly protecting your home from certain creditors.
Disadvantages include the cost of creating the trust and the paperwork.
Trusts also do away with estate executor fees. A testamentary trust, sometimes called a “trust under will”, is created by a will after the grantor dies.
This type of trust can accomplish the following estate planning goals: Preserving assets for children from a previous marriage.
Protecting a spouse’s financial future by providing a lifetime.
The high-income individual directs their earnings into a trust.
These can’t be wage and salary earnings, so they are generally business or investment income.
The trustee will generally make payments to those beneficiaries with the lowest incomes, who will pay the least tax.